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Jury gets started with questions
Deliberations' Day 1 includes call for prosecution exhibit
By Andy Vuong, Staff Writer
Denver Post
Friday, April 13, 2007

A jury of eight men and four women completed the first day of deliberations in the criminal insider-trading case of former Qwest chief executive Joe Nacchio without reaching a verdict.

In their hands is the fate of a man accused of illegally selling $100.8 million in Qwest stock during the first five months of 2001.  Nacchio could face 10 years in prison if convicted on just one of the 42 counts of illegal insider trading.

The jury appeared ready to pore over the multitude of evidence presented during the past four weeks, posing questions about exhibits to the judge shortly after deliberations began Thursday.

Jurors asked for a master list of exhibits, which was granted.  U.S. District Judge Edward
Nottingham denied their request for a large, foam board that prosecutor Colleen Conry used during her closing argument as a demonstrative exhibit to break out the 42 counts.  A United Airlines pilot was selected as the jury foreman.  Others in the group include a radio grapher, an engineer, administrative workers and retirees.

The jury is scheduled to reconvene today at 8:45 a.m.

Nottingham read instructions to jurors for about an hour Thursday morning before sending them to their 10th-floor jury room at the Denver federal courthouse with a copy of the indictment, a verdict form and their personal notes.

"You have two main duties as jurors in this case," he said.  "The first is to decide what the facts are.  The second is to follow the law stated in the instructions of the court, apply the law to the facts, and decide if the government has proved the defendant guilty beyond a reasonable doubt."

Nottingham told them they must find that the government proved beyond a reasonable doubt that Nacchio sold stock on the basis of inside information and did so with an intent to defraud:  "It is not sufficient for an insider merely to have possessed the material nonpublic information when he traded."

The government alleges Nacchio was repeatedly told by his top executives beginning in late 2000 that Qwest would struggle to hit financial targets in 2001.  Instead of disclosing the problems to the public, prosecutors say, Nacchio dumped stock faster than ever from January to May 2001.

Nacchio's attorneys have contended that he was upbeat on Qwest and was forced to sell his stock options because they were set to expire.  They've also said the warnings given to him were about internal budgets, which were set higher than the public guidance the company issued.

During his instructions, Nottingham guided jurors on how to examine testimony from witnesses who have reached plea deals with or received immunity from the government in exchange for their cooperation.  Several government witnesses, including former Qwest president Afshin Mohebbi, received immunity for their testimony against Nacchio.

Such witnesses are "competent," Nottingham said.  "But you should examine that testimony with greater care than the testimony of an ordinary witness."

The jury foreman has worked as a United Airlines pilot for 20 years.  He is married to a former flight attendant.  During jury selection, he said top executives should be paid based on how their companies perform.

"Well, you know, as long as they're returning equity back to the shareholders and the company is meeting its objectives, I think they should be paid well," he said.  "But when the companies do poorly, and they're not performing in their jobs, I think in those cases, they are overpaid."

Nottingham then asked, "Can you foresee how that opinion would affect any verdict you would render in this case?"

"It could possibly," he responded.  "I don't believe it would because I have no hard feelings toward the executives through (although) United's going through the bankruptcy."

Nacchio joined Qwest in 1997 and was ousted by the board of directors in June 2002.  He led Qwest through tremendous growth before the company nearly crashed into bankruptcy at the end of his tenure amid the tech downturn and news of accounting irregularities.  Qwest later restated $2.5 billion in revenue booked from 2000 to 2002.

Staff writer Andy Vuong can be reached at 303-954-1209 or